Besides termination, what other rights does the Buona franchisor have if a franchisee defaults?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.8 Right to Operate Upon Default**.** In addition to Franchisor' right to terminate this Agreement and not in lieu of such right or any other rights, in the event that Franchisee has not cured a default under this Agreement within fourteen (14) days after receipt of a written notice of default, Franchisor may, at its option, enter upon the Premises and exercise complete authority with respect to the operation of the Franchised Business until such time as Franchisor determines that the default has been cured and that there is compliance with the requirements of this Agreement.
Franchisee acknowledges and agrees that Franchisor's agent or other representative designated by Franchisor may take over, control and operate the Franchised Business, that Franchisee shall pay Franchisor the then-current published fee for such management service, plus all travel expenses, room and board and other expenses reasonably incurred by such agent or representative so long as it shall be required to enforce compliance with this Agreement.
Franchisee further acknowledges that if Franchisor temporarily operates the Franchised Business on Franchisee's behalf under this Paragraph 16.8, Franchisee will indemnify and hold harmless Franchisor and Franchisor's agent or representative respecting any and all claims arising out of Franchisor's operation of the Franchised Business under this Paragraph 16.8.
Nothing herein shall require Franchisor to operate the Franchised Business when Franchisee is in default.
- 16.9 Monetary Fees for Non-Compliance.
In addition to any and all other remedies available to Franchisor under this Agreement or under the law upon a default by Franchisee, Franchisor may impose on Franchisee monetary non-compliance fees for the defaults described in this Section 16.9:
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, besides termination, Buona has other rights if a franchisee defaults. Buona can enter the premises and exercise complete authority over the operation of the franchised business if the franchisee has not cured a default within 14 days of written notice. This control continues until Buona determines the default is cured and the franchise is compliant.
During this period, a Buona agent or representative may take over, control, and operate the franchised business. The franchisee is responsible for paying Buona the current published fee for this management service, along with all travel expenses, room and board, and other expenses incurred by the agent or representative. The franchisee must also indemnify and hold harmless Buona and its representatives from any claims arising from Buona's operation of the business during the default period.
Additionally, Buona may impose monetary non-compliance fees for certain defaults, as outlined in Section 16.9 of the franchise agreement. It is important to note that Buona is not obligated to operate the franchised business on behalf of the franchisee during the default period. These measures provide Buona with options to ensure compliance and protect its brand standards even if termination is not immediately pursued.